When Bob Wahl, owner of R.C. Wahl Jewelers in Des Plaines, Ill., first started carrying natural colored diamonds in his Chicago-area store in the 1960s, the customers who spotted them in his display case had no idea that the brightly hued, bewitching stones they were looking at were diamonds, the www.nationaljewelernetwork.com portal says.
That lack of awareness is rarer these days, as more and more mainstream consumers understand that their diamond options go beyond just colorless or near-colorless-and as more retailers bring colored diamonds to their cases. For those who don't know what they are, the colorful gems are a conversation starter.
"[My customers] came in, and still frequently come in, and don't recognize them as diamonds," Wahl says. "The general population is definitely more aware of natural fancy color today than they were 10, 20 or 30 years ago."
For retailers, natural colored diamonds could be the antidote to that same-old-thing malaise, providing what experts say is a sales driver in this post-recession era, when a luxury item must be worth it to the consumer-and should not be something that is prominently featured at the store down the street or easily price-shopped on the Internet.
The big drawback to colored diamonds is the cost of getting into the category with a respectable amount of inventory, though this is proving less and less of a deterrent, it seems. When National Jeweler conducted its Product Panel survey-a monthly survey assessing jewelers' practices in specific categories-on colored gemstones in early 2009, only 34 percent of respondents selected colored diamonds as being among the top-selling colored gemstones in their store.
Fast-forward one year, and that figure has jumped to 68 percent. In fact, colored diamonds were the second most-selected gemstones on the list.
Only sapphire, with 81 percent of the vote, garnered more best-seller nods.
Another telltale sign that stones are gaining momentum in the market: an uptick in activity at the Natural Color Diamond Association (NCDIA), an organization that works with manufacturers, suppliers and retailers to promote the stones.
NCDIA Executive Director Rob May says seven years after its formation, the organization's membership is up to 250 (each store counts as one member regardless of the number of locations).
"No one else can compete with you in the market," when you offer these stones, May says. "I think retailers are really looking at their business and saying, 'How can I do business better? I'm getting fewer customers, but how can I make each sale count?'"
In addition, May says activity on the NCDIA Web site has picked up appreciably since October, not from member retailers, but rather from consumers inquiring about pieces featured in the organization's design gallery.
"More people know [about colored diamonds] than ever before," May says.
From Marilyn to Jenny from the block
Some of the world's most famous diamonds are of the colorful variety. The 45.52-carat Hope Diamond, quite possibly the world's most celebrated gemstone-and now among the Smithsonian Institute treasures inspiring a new jewelry collection on QVC-is blue in hue. So, too, is the recently renamed Wittelsbach-Graff Diamond, which set a new world record price for any gemstone sold at auction when diamantaire Laurence Graff paid $24.3 million for it in December 2008.
Even screen icon Marilyn Monroe donned a colored diamond, the 24.04-carat canary yellow "Moon of Baroda," while promoting Gentleman Prefer Blondes, the 1954 film that featured the song "Diamonds are a Girl's Best Friend."
While natural colored diamonds have long been fixtures among the elite, retailers and dealers agree that they didn't break into the consciousness of mainstream Americans until the late 1980s and early 1990s, with a few key events helping to nudge consumer awareness along.
One major contributing factor was the marketing muscle placed behind Rio Tinto's then-new Argyle diamond mine in Australia, known for its pink and brown diamonds.
Jean-Marc Lieberherr, an Antwerp, Belgium-based Rio Tinto executive who oversees sales and marketing for the company's diamond production, says that when the mine started producing diamonds in the mid-1980s, it didn't take long for executives to realize that the majority of production would be brown diamonds.
"This began to exercise the minds of Argyle executives to the point that by 1987 to '88, serious strategies were being planned to enhance their value," he says, adding that the main flurry of marketing development took place between 1988 and 1995.
In the late 1980s, Rio Tinto registered the trademark "champagne diamonds" in several countries and established a grading system for brown diamonds. In the early 1990s, Lieberherr says, the company conducted extensive market research in the world's largest consumer market for diamonds, the United States, and established the now-defunct Indo Argyle Diamond Council.
"These studies confirmed the strong potential for champagne diamonds and challenged some of the conventional attitudes within the diamond industry," Lieberherr says.
In the midst of Rio Tinto's champagne push, another event occurred that industry experts mark as significant in the modern-day history of natural colored diamonds. In April 1987, a 0.95-carat red diamond sold at Christie's New York for $1 million, a price tag that astounded at the time and brought to light the rarity and value of natural colored diamonds.
"It was crazy," recalls Natacha Langerman, who, alongside her father Arthur, runs Antwerp-based Langerman Diamonds, a wholesale diamond company and Internet retailer. "Suddenly people realized, colored diamonds, they are something."
And, of course, no chronology of colored diamonds would be complete without mention of the famous pink diamond sported by singer and actress Jennifer Lopez, who went by "J. Lo," during her highly publicized engagement to then-fiancé, actor Ben Affleck in 2002. Though the pair never made it to the altar, that famous engagement ring started an enduring public love affair with pink diamonds that is still going strong, says the NCDIA's May.
Nilesh Sheth, president of Nice Diamonds and a dealer of colored diamonds since 1979, couldn't agree more.
"It started with J. Lo wearing the pink diamond," Sheth says. "That was the beginning of something that led to many more people at a consumer level getting into colored diamonds."
Lopez wasn't the last celebrity to bring color to an engagement. Recently, country crooner Carrie Underwood said "yes" to fiancé Mike Fisher's yellow diamond engagement ring, and actress Kristen Bell got engaged with a brown diamond.
Hue it up
While the fact that high-paid celebrities are picking pink or yellow for their engagement rings makes headlines, the news might not speak much to the average independent jeweler, who is struggling to get today's cost-conscious consumers to part with a few thousand dollars to buy a bracelet or pair of earrings.
May definitely understands this dilemma.
"The biggest challenge retailers have is inventory," he says.
The good news for today's retailers is they can get into the category via lines like Le Vian's "ChocolateDiamonds" or Rio Tinto's new gray diamonds, dubbed "Silvermist." Lieberherr says there are about a dozen retailers in the United States, United Kingdom and Middle East carrying the line of silvery-gray stones, which launched in February.
"It is still early but we are getting positive support from a market that is hungry for new and affordable product offerings," he says.
May says another option for NCDIA member retailers is to host a Natural Color Diamond Event, an in-store happening that allow retailers to leverage NCDIA's relationships with suppliers to display millions of dollars in natural colored diamond jewelry for five to seven days.
When the event is over, the jewelry gets packed up and shipped off to the next retailer.
Olivia Johnson Scholz, who co-owns St. John and Myers jewelry store in Lexington, Ky., with husband Louis, held an NCDIA event in her store around Thanksgiving in order to expand customers' minds about the category.
"Right now, in our store, the biggest challenge we see is [that customers think] natural color diamonds equals expensive, equals 'I can't afford it,'" she says.
Scholz added a charitable twist to the gathering, calling it "Color Diamonds for a Cause" and donating a portion of the proceeds to a charity that supports a local hospital.
St. John and Myers promoted the event using Facebook, e-mail marketing, in-store ads and direct mail to VIP clients.
Though Scholz would not disclose details on the number of pieces sold, she deemed the event a success on various levels. For one thing, the gathering opened her customers' eyes to the spectrum of colors available, as vendors displayed a rainbow of yellows, browns, greens and even a peach-colored diamond.
"In our market, most people had maybe seen one piece, if any at all," Scholz says. "That alone was educational because, most people, when they think of colored diamonds, think of yellow and they think that's where it stops."
Using multiple vendors at the event also allowed St. John and Myers customers to see that natural colored diamonds aren't just used for high-priced engagement rings. The event display included everyday necklaces, fashionable cocktail rings and funky brooches priced from $1,000 to well above $300,000.
"That diversity was helpful too," Scholz says, adding that she took note of the pieces customers preferred and their respective vendors in preparation for potential future sales.
Scholz says she plans to make natural colored diamond promotions an annual event at her store but will hold the event early in the fall to get a jump on Christmas sales.
"Anytime a store can differentiate itself from its competition it's a good thing," she says. "I see natural color diamonds as a very easy way to differentiate yourself."
